How to Check if a Car Has Finance Owing

Why it matters

If a car is used as security for a loan and that loan is not paid out, the lender may have the right to repossess the vehicle, even after it has been sold to someone else. Checking before you buy helps you avoid inheriting a debt that is not yours.

What is a PPSR search?

The Personal Property Securities Register (PPSR) is a national government register in Australia. A search shows whether a vehicle is listed as security for a debt, and also whether it has been reported as stolen or written off. Searches can be done online through the official PPSR website for a small fee.

What you need for a search

• The vehicle identification number (VIN), usually found on the compliance plate, the registration papers or at the base of the windscreen
• Alternatively, the chassis number for older vehicles
• A few minutes to complete the online search and download the certificate

What the certificate shows

• Whether a financial interest is registered against the vehicle
• Stolen vehicle status, as reported by police
• Written off status, as reported to state and territory registers
• Basic vehicle details so you can confirm they match the car in front of you

If the car has finance owing

A registered interest does not always mean you should walk away, but it does mean the debt needs to be cleared before or at the time of sale. Many buyers ask the seller for a payout letter from their lender and arrange for the debt to be settled directly, then run a fresh search to confirm the interest has been removed. Licensed dealers are generally responsible for clearing any finance on cars they sell.

Other checks worth doing

• Confirm the seller's identity matches the registration details
• Arrange an independent pre purchase inspection
• Check the service history and odometer reading
• Get a copy of the PPSR certificate dated close to the day you pay

How this relates to used car finance

If you plan to finance a used car, lenders will usually require the vehicle to be free of any existing finance before they approve a secured loan against it. Running a search early can help avoid delays later.